I am just a little curious, which round has better penetration vs. body armour, battlefield debris, etc. Given my (limited) experience with the .303 calibre I would automatically say the M43 comes out on top but I wouldn't mind hearing some operators' opinions.

I pulled up some reloading stats at reloadersnest.com. I pulled up the more powerfull loads I could find. This may not be like the military loads but here are the stats anyway.
7.62x39
125 grain
2323 FPS
Energy 1495 ft-lbs
TKO 12.78
OGW 294 lbs
.223
60 grain
3259 FPS
Energy 1412 ft-lbs
TKO 6.2
OGW 187 lbs
What is interesting is the TKO and the OGW values for each round. An explanation of these values is here, http://www.reloadersnest.com/ogw.asp Basicly by using the two values together, you can gauge the effectiveness of a round against a target. The formulas however do not take into effect the fragmentation of a bullet. They assume that they stay intact. While it may not be totaly acurate against a human, the can describe the performance on a slab of concrete. While the bullets have similar energy, there teminal performance is different.
The concrete needs the same amount of force to break it and slows the bulet down in the process. The .223 has most of its energy in velocity, so when it is slowed down, it loses its KE rather quickly. When the 7.62 hits concrete, its KE is less affected by the change in velocity as more of it's KE is in mass. So while the bullets may have the same energy the moment of impact, the .223 is effected more by the change in velocity than the 7.62.

Since the question is which has better penetration, you also need to consider cross sectional area of the projectile. The 7.62mm has nearly twice the cross section as the 5.56mm. I don't know what other factors might apply (e.g., ogive shape, materials characteristics like hardness, projectile deformation during penetration) or in what amounts, but the complete answer isn't found only in momentum and/or energy comparisons.
Penetration per se isn't about the bigger hole, but rather the deeper hole. Off-hand, I'd guess the 5.56mm M855 out-penetrates the typical 7.63x39 ball round.
Displacedjim

This is a debate we have in Finnland every two moths. CounterSrike generation feels that army should swap to 5.56mm and M4 and we oldies try to tell them that no we really shouldn't (Boys are certain we gotta be commies to advocate for soviet round...)
But anyhow. As Crosshair pointed out 5.56 is fast light round and it is more narrow and bullet is "longer" than in 7.62mm.
5.56mm will make a quite respectable hole due fragmentation in ranges under 100m, but loose that ability after that. So then the wounding characteristics are not nearly so spectacular anymore. Also due lightness and high velocity it will bleed off energy faster than 7.62mm. Hits wit foliage make this bleeding off even faster. as Crosshair pointed out.
As to penetration 5.56 penetration is initally against hard targets better than 7.62's but may fail to penetrate even interior walls.
7.62 on the other hand doesn't make as impressive wounds close, but will still take large chunks out of people and it will penetrate walls and foliage better than 5.56.
as "huntingwise" here the 7.62 would be borderline legal on moose. while 5.56 MIGHT be considered enough for deer there is enough energy but round is too light.
If I could have my way and tinker a bit with 7.62m43 I'd change the 8g FMJ to 6g FMJ and achieve little more speed to make the trajectory flatter.

as "huntingwise" here the 7.62 would be borderline legal on moose. while 5.56 MIGHT be considered enough for deer there is enough energy but round is too light.
fwiw i don't know anyone who considers 5.56 nato rounds to be adequate for deer hunting here in canada. i know a couple guys like .243 and .270 but most like the assorted 30 cal type rounds.

one hundred meters in I would use the 7.62x39 on deer much further out and I would pick up a .223 with very good bullets. I limit range to 200 meters with the .223. We hunt in open country so we can watch the deer after it has been hit and see where it goes down. From what I have seen in the field neither of these are good deer hunting rounds. the 7.62x51 has about twice the effective range as either of them.

I assume that you are comparing the 5.56x45 NATO cartridge with the 7.62x39mm Soviet cartridge.
The 5.56 does not bleed off energy faster that the 7.62x39mm. The ballistic coefficient for the 62 grain 5.56 caliber bullet is .349 versus .252 for the 123 grain 7.62 bullet.

If penetration is the prime desiderata, the winner is the 70-gr. penetrator (ballistic tip) in 5.56 x 45mm. Higher velocity and lower cross-sectional area plus heavier bullet equals better results vs. Kevlar. Unfortunately, it's not as effective at stopping the wearer thereof after it's gotten through his vest than either 7.62 x 39 or the old M193 55-gr. ball in 5.56, but I guess you can't have everything..

Well it does actually, as the comparable velocites are higher then the drop and drag will be higher. amounting fater bleedof to some range but that would be past the 300m boundary. After then the M43 will indeed bleed velo off faster.
But for all shall we say "practical combat ranges" (<300m) M43 has more energy.
There is no doubt that 5.56 is more lethal in ranges under 100m but after that the frgmentation does not happen consistently.
Hmm I might venture to say that 5.45 soviet is in all around lethality better than either of the aforementioned rounds because of its design.
It doesnt fragment, but becomes unstable when it hits target and tumbles out to 500m+ if recollection serves.
The new chinese 5.8mmx42 may be "the best" assault rifle round out there currently. But the data on 5.8 are a bit sketchy right now.